OIL'S NOT PEAKING

December 19, 2007

Peak oil advocates claim that the world is running out of oil unless the West gives up its energy-consuming lifestyle. Like global warming and population-bomb Malthusianism, it's essentially junk science because it operates on a static model. Crucially, it leaves out the politics of whether oil companies are allowed to discover or not, says Investor's Business Daily (IBD).

Unlike bans on offshore drilling, as in the United States, many developing countries are finding a windfall, says IBD:

Recent news suggests that Brazil may be sitting on even bigger oil deposits than the recently discovered (and huge) Tupi field; Tupi alone almost doubled Brazil's oil reserves and may raise Brazil to the rank of 10th biggest oil producer from 17th currently.

Besides Brazil, China has made 10 major new discoveries this year alone; its Bohai Bay discovery last May, its largest in four decades, added 7.35 billion barrels of reserves.

India, once viewed as an energy no-hoper, is also finding energy offshore, and Russia already is a major producer.

Meanwhile:

Last year Mexico made a huge offshore discovery it has yet to tap.

In the tiny area where U.S. energy companies are permitted to drill offshore in the Gulf of Mexico, Chevron, Statoil and Devon Energy made the biggest discovery since the Alaska Prudhoe find decades ago.

It's so big it could add 50 percent to the U.S.' 29 billion barrels of domestic energy reserves.

Daniel Yergin, head of Cambridge Energy Research Associates, notes that technological breakthroughs also are enabling the production of more energy. Not only can new technologies recover resources from old wells previously thought tapped out, it can create oil from formerly useless resources, like tar sands. It also can recover oil and natural gas from previously impossible geography, like the deep blue sea miles beneath the surface.